BOJ Outlook Report (July 2026): moderate growth, inflation to exceed 2%How the Bank of Japan sees the economy ahead (July 2026)
On July 31, 2026, the Bank of Japan published the Bank's view in its Outlook for Economic Activity and Prices (July 2026), decided at the Monetary Policy Meeting held on July 30 and 31 (the full text with the background explanation followed on August 3). Higher oil prices weigh on the economy, but growing global AI-related demand and government measures provide support, so growth is expected to slow yet remain moderate. Year-on-year CPI (all items less fresh food) is projected to rise clearly above 2% from the latter half of fiscal 2026.In the Outlook Report it published on July 31, 2026, the Bank of Japan says that although higher oil prices have an effect, growing demand related to AI and other factors support the economy, so Japan's economy keeps growing slowly. It expects price increases to grow larger from the second half of this fiscal year, to clearly above the 2% the Bank is aiming for.
- (1) EconomyGrowth gets smaller but continues moderately
- (2) PricesWith pricier oil and a weak yen, clearly above 2% from the latter half of fiscal 2026
- (3) After thatThe effect of pricier oil fades and price increases ease toward about 2%
- (4) Things to watchThe Middle East situation, AI-related demand and exchange rates